Today's guest is a successful wholesaler in my local Michigan market who I've actually done business with: Steve Londeau.
I've recently started wholesaling myself, and I really look up to Steve. I think a lot of him and how he runs his business, and I'm excited to bring him on the show to help me and you with wholesaling.
Steve started in real estate in 2006. He had been working at a title insurance company since the mid 90's, and wanted to eventually invest in real estate. He met an investor who did short sales in 2006, who helped introduce him to the business. Throughout the next few years he did short sales here and there until the market meltdown in 2009. He spent 2009 to 2011 exclusively doing short sales in a way that he describes as cutting edge. After that, he went into wholesaling because he found it quick and simple, though not exactly easy. Steve has been wholesaling full-time for about one year now.
If you're not familiar with the basic principles of wholesaling, Steve and I go over the basics in the full episode. A wholesaler finds a motivated seller, signs a contract, finds a buyer, and assigns that contract to the buyer for a fee.
Steve started wholesaling because he really needed money and he needed it fast. He found a house in Detroit using a service called zbuyer and wholesaled it for $2,500, which made him realize that wholesaling, and even wholesaling in Detroit, was possible. While zbuyer isn't free and the leads aren't always great, it's a good place to start if you don't have any connections or experience yet.Direct mail is another way to attract motivated sellers, though it might take a little longer. Steve gives his recommendations for finding target lists to market to in the interview. He personally focuses on targeting absentee home owners and uses both yellow letters and postcards. He finds that there are a few differences between the two, which he goes over in more detail.
Steve obviously has some great systems in place and uses some reliable services in his business; he talks us through them, how he found them, and how he grew to trust them in the interview.
Steve also goes over his very specific technique for talking to sellers to get the best deal possible by asking the right questions the right way and figuring out their motivation. These negotiating tools are essential!
Finally, Steve talks about what happens when, as a wholesaler, you make a mistake and get stuck with a house. It doesn't happen often, but you have to be prepared for it and know how to handle it when it happens. The best advice is to know that, if you have a deal, you will find a buyer. Just get the property in front of as many eyes as you can. Eventually, you will know exactly who to call first to sell each property. On that note, Steve underlines the value of local REA meetings for networking with other investors, especially for a wholesaler, and how to approach them with a desire to help in their business and bring something to the table.
I've set up the wholesaling arm of my business to emulate Steve's process because I really admire his work, so I hope you found this interview very useful. If you have any questions or want to do business with Steve, feel free to email him at firstname.lastname@example.org or contact him on Facebook.
Over the course of this week, I will be taking you through every part of the wholesaling process in more detail. Don't miss it!
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